Operating profit was £12m but this was wiped out by impairment charges of £39m (money set aside to cover outstanding loans).
Commenting on the results, Chief Executive Officer Gerry Mallon said: "These results reflect our expectations for the start of the year.
"Market conditions remain challenging and we do not expect to see a reduction in impairment charges before the half year. Prudent provision continues to be made for these potential bad debts," he said.
"Despite the fact that the housing market remains sluggish, our very competitive mortgage campaign in this first quarter has been successful in encouraging movement in the market for both new and existing customers.
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"The 10% rise in deposits is consistent and a further improvement on the year on year growth of 8% reported for 2010."
According to Mr Mallon the bank's capacity to lend more than exceeds the demand for lending which they are seeing from personal and business customers.
"In particular we welcome ambitious trading businesses to come and challenge us to support their business," he continued.
"Given the challenging conditions for business, our Straightforward Business masterclasses launching shortly across Northern Ireland will help to ensure that we remain supportive of business in dealing with ongoing challenges or, more encouragingly, with business efficiencies, investment, and development opportunities.
"Our Corporate Banking team secured a major award for excellence in the NI Dealmakers Awards.
"Industry and business voters repeatedly praised Northern Bank for having an open door to local business throughout the hardest of times. The award recognized Northern Bank's competitive position in the local market and its continued support of local business growth.
"We have started 2011 as we mean to continue – bringing our expertise, capability, and straightforward banking to consumers and businesses alike," he concluded.
(GK/BMcC)
